Nonparametric Analysis of Time-Inconsistent Preferences

Martin Browning, Ian Crawford and Laura Blow

No 835, Economics Series Working Papers from University of Oxford, Department of Economics

Abstract: Abstract This paper provides a revealed preference characterisation of quasi-hyperbolic discounting which is designed to be applied to readily-available expenditure surveys. We describe necessary and sufficient conditions for the leading forms of the model and also explore the consequences the restrictions on preferences popularly used in empirical lifecycle consumption models. Using data from a household consumption panel dataset we explore the prevalence of time-inconsistent behaviour. The sophisticated quasi-hyperbolic model provides a signi ficantly more successful account of behaviour than the alternatives considered. We estimate the joint distribution of time preferences and the distribution of discount functions at various time horizons.

Keywords: Quasi-hyperbolic discounting; revealed preference (search for similar items in EconPapers)
JEL-codes: D11 D12 D90 (search for similar items in EconPapers)
Date: 2017-09-21
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Citations: View citations in EconPapers (2)

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Related works:
Journal Article: Non-parametric Analysis of Time-Inconsistent Preferences (2021)
Working Paper: Nonparametric Analysis of Time-Inconsistent Preferences (2020)
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